This is a great explanation by Lyn Alden https://seekingalpha.com/article/4578226-how-fed-went-broke

Normally the Fed makes money. They pay interest on short term deposits and collect interest on the long term bonds they hold. The positive amount is the flow from the fed to the treasury (what the fed does with profit). Given the recent crazy hikes, the fed is now in an opposite position. It’s having to pay a large sum in the short term and losing money on its long dated assets. Because they are losing money, the treasury now needs to pay them. In other words, American tax dollars are going to pay for the feds losses.

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